Income Discrimination in Rental Housing

Since we first began working in human rights and housing, CERA has been confronted with the devastating consequences of minimum income qualifications upon equality seeking groups. Widely used by private landlords, income discrimination is the practice by which landlords require that a potential tenant’s rent not exceed 25 or 30% of income. Social assistance recipients cannot meet these criteria. The structure of social assistance and the nature of the rental market is such that recipients have to pay significantly more than 30% of their income toward rent. Nor can most youth living independently. Refugee claimants, single mothers and young families usually cannot meet the criteria and are therefore denied the most affordable accommodation they can find. If landlords are permitted to refuse to rent to these groups because of their low income, then the protections in Ontario’s Human Rights Code in the area of housing become virtually meaningless for most disadvantaged groups.

In 1993, the Human Rights Commission referred this major systemic issue to a specially appointed three person Board of Inquiry in the case of Dawn Kearney, J.L. and Caterina Luis v. Bramalea Limited, The Shelter Corporation and Creccal Investments Ltd. (Kearney). The case involved almost 60 days of hearings over three years with close to 30 intervenors including advocacy and support organizations for tenants, youth, women, newcomers and refugees, people with disabilities and the poor.

On December 22, 1998, low income and other disadvantaged households across Ontario won a major victory in their fight for equal rights. The Board of Inquiry found that using income criteria to select tenants, either alone or in conjunction with other factors, is a violation of the Human Rights Code. The decision in Kearney was based on the Board’s finding that, while there was clear evidence that income criteria disproportionately exclude disadvantaged households from available rental housing, there was no evidence to suggest that using income criteria would reduce the risk of rental default, or that giving up this practice would result in any hardship for landlords. In other words, the use of income criteria in tenant selection was found to be discriminatory and without justification.

While not a part of the formal decision, the Board of Inquiry also made it clear that landlords should not deny accommodation to prospective tenants because they have no credit history or landlord references, as is often the case with young people and newcomers to Canada. As the Board stated, landlords "must be mindful that there is a difference between a tenant having no credit rating and a bad credit rating. There is a difference between a poor reference from a previous landlord and no reference." Aslam Ahmed v. Shelter Canadian Properties Limited, decided in May 2002 by another Ontario Human Rights Board of Inquiry, confirmed that denying accommodation to prospective tenants on these grounds is discriminatory and illegal under Ontario’s Human Rights Code.

There has been some confusion over how to interpret the Kearney decision in light of recent changes to the Human Rights Code contained in the Tenant Protection Act (TPA). With the proclamation of the TPA in June 1998, amendments to the Code permitting the use of income information in tenant selection came into effect. What many people do not realize is that, as a result of strong opposition to the amendments voiced during public hearings on the TPA, associated regulations state that income information and other tenant selection practices cannot be used to discriminate against groups protected under the Code. CERA does not believe that the Kearney decision is in conflict with the changes to the Code contained in the TPA. A number of income criteria cases decided by Boards of Inquiry subsequent to the Kearney decision have confirmed this position.